Ratan Tata: Corporate Social Responsibility in 21st Century

[APPLAUSE] DAVID SKORTON: Thank you so much. Good afternoon and welcome to the Olin Lecture. Each year this series presents an internationally prominent speaker addressing a topic relevant to higher education and the current world situation. Established in 1986 by the Spencer T. and Ann W. Olin Foundation, the lecture has become a highlight of reunion weekend.
This year we bring you not so much a lecture as a discussion, which I will be honored to conduct with an alumnus whose name is synonymous with business acumen, corporate responsibility, and inspired an innovative philanthropy. Ratan Tata's best known new product is something that many people thought was impossible to build. A $2,500 car.
But Tata Motors Nano sub compact, unveiled this spring, is for sale in India at the targeted price of 100,000 rupees, making it the first car within the reach of the Indian working class. More than 200,000 people reserved the Nano in just two weeks of sales. The initial production run targets 100,000 vehicles and their lucky buyers will be selected by lottery.
Like many of Ratan's business projects, the Nano represents both good business and good works. The sight of whole families squeezed precariously onto a single motorcycle or scooter, a common sight in India and elsewhere in the developing world, inspired Ratan Tata to take on the challenge of producing an affordable, safe personal transportation. He took a personal interest in the car's design and insisted on the cost cutting necessary to keep the price down.
Profit, he predicted, would come not from the base model, but from the somewhat higher priced versions of the Nano with larger engines and more equipment. And indeed, half of the first orders for the Nano were for the high end Nano LX, costing $3,700, a fact that industry analysts say bodes well for Tata Motors.
As chair of Tata Sons LTD, the holding company of the Tata Group, Ratan heads India's largest industrial conglomerate, with over 80 companies and significant international operations. In his youth, however, entering the family business was not a foregone conclusion. He came to Cornell as an engineering student in the class of '59 and we're delighted that he is here to celebrate his 50th reunion. While at Cornell, Ratan developed a fascination with architecture, which led him to earn the Bachelor of Architecture degree in 1962. And I might comment that 50 years later, that is the number one program in the United States.
However, he was persuaded to join Tata Sons soon after completing his degree. And gaining experience with various of the Tata companies, he rose quickly and was made chair when his uncle retired in 1991. Since then, he has altered and expanded the Tata group in bold and visionary ways. Selling off less promising companies, fortifying others, and launching entirely new initiatives, he has more than once triumphed over predictions of failure. Under his leadership, the Tata Group has acquired such international corporations as Corus Group, an anglo-dutch steel and aluminum producer, Tetley Tea, Jaguar, and Land Rover.
The world has taken notice of Tatan's accomplishments. In 2007, he was listed by Fortune Magazine as one of its 25 most powerful people in business and Barron's Magazine cited him as one of the 30 most respected CEOs worldwide. Last year he made Time Magazine's list of the world's 100 most influential people. The Tata Group has some 320,000 employees and a long history of treating those employees well.
The origin of the Tata empire lay in a textile mill opened in 1868. Astonishingly for those days, the mill offered its workers pensions and compensated them in case of an accident. The Tata tradition of corporate responsibility continued through the years and has been greatly solidified by the current chair.
Ratan Tata personally holds only a small stake in the Tata company's, 66% of whose equity capital is held by philanthropic trusts. These trusts support literacy and other educational programs, water conservation, and other initiatives that benefit India's poor. Together the Tata trusts comprise the largest grant making organization in India. And in 2007, Ratan accepted the Carnegie Medal of Philanthropy on behalf of the Tata family.
Cornell too has benefited from the generosity of Ratan Tata. The Tata Education and Development Trust recently committed $50 million to Cornell to establish two new projects, the Tata Scholarship Fund for students from India and the Tata Cornell Initiative in Agriculture and Nutrition. The first four Tata scholars will be arriving on campus this August. When fully endowed, the fund will support six or more students in each undergraduate class. And the Agriculture and Nutrition Initiative, meanwhile, supports collaborative research by scientists and students, both in India and at Cornell, research that will surely benefit the daily lives and livelihoods of people in India.
I am deeply grateful to Ratan Tata not only for these endowments, but also for his service on the Cornell board of trustees. And I have the utmost respect for his choice to support his alma mater in a way that also benefits the people of India. Today it is our collective privilege to hear Ratan's view on corporate social responsibility. Please welcome fellow Cornellian, Ratan Tata.
[APPLAUSE]
Well, the ground rules now. We are Cornellians, after all. We need ground rules. I'm going to share seven specific questions with Ratan to get the conversation going. And then you're going to continue the conversation. And we're going to go till 4:15. And so we'll get started.
Ratan, first of all, welcome and thank you so much for everything you've done, and especially for sharing this extra time for the Olin Lecture. Perhaps we could start by asking you to please describe the Tata trusts and to summarize the proportion of the funds in the trust and in general that are used for charitable purposes.
RATAN TATA: OK. Thank you, David. The trusts were established at the time of the death of the two sons of the founder who left their entire holding in the company in two trusts. And other members of the family had smaller holdings and there's an outside shareholder that holds the rest. And they left virtually their entire wealth in those foundations with the mandate that this be spent on education, medical help, and alleviation of poverty in those days.
Last year the trust disbursed about $90 million equivalent in rupees for these charitable purposes. And the operating companies in themselves disbursed a similar amount in the rural areas around which the companies were. So about $200 million last year were disbursed. All told, I think, since their inception, about half a billion dollars have been dispersed for those purposes. After that has come some hospitals, institutions.
And the purpose of that was that we should give back to the people what we have derived in terms of prosperity. And that's been the basis on which it has been set up.
DAVID SKORTON: Thank you. Congratulations for such a record. Tata Sons is known and very widely respected for honesty and financial probity. Has this been a handicap in the fiercely competitive global business world?
[LAUGHTER]
RATAN TATA: I think at times, a lot of people would say it has been. But by and large, I think we have been still able to grow and prosper. Maybe not as much as we might have, but in, I think, 1990 our total revenues were probably about six to seven billion. And last year we would have been close to 80 billion. So we haven't done so badly, despite that. And we did it honestly.
[LAUGHTER]
[APPLAUSE]
DAVID SKORTON: Well, we've all heard the expression doing good by doing well. I guess this is the embodiment of that. I want to probe this general area just a bit more. For a century and half, the Tata enterprises have been built on, I mentioned, the foundation of caring for employees way beyond the usual norms of business. I mentioned the example of the textile mill and pensions and sort of an early version of the worker's comp, if you will. In the very extremely competitive globalized business world and with the pressure on expenditures in all of our organizations, is this care for employees' well-being still feasible?
RATAN TATA: We've been criticized for this by several investors, usually foreign investors.
[LAUGHTER]
No offense meant. Just that there's a view that the money belongs to them. And at the same time, I mean to tell you that the 200 million that we disburse is about 4% of our total group profits. And there's therefore a feeling it's not insignificant and it does belong to the shareholder.
What it has done for us, it's given us a great deal of harmony with our employees. We have not had violent strikes. We have not had great disruptions of work. And quite often, we find in some of our companies that we have second and third generation employees.
Where it does impact us is we're an old group. You mentioned that we have 300,000 employees. And in today's world, you need to rationalize that manpower. We have been able to reduce manpower voluntarily by paying employees their current wages to the end of their working life. It's still cheaper than having them on the rolls. But what it has done, it has given us an ability to carry credibility with our people, because there is a feeling that we, in fact, care for them.
So I would say on the whole that there has been a great plus in caring for our employees. And even if those people who feel that this is a waste will one day realize that in the long term, it's been a great asset.
DAVID SKORTON: Wonderful. Just a comment in passing, because you're on the board of trustees, you know this well, but just to share with our colleagues here. We've been recognized several times over the last decade and more at Cornell also for being a caring employer. And one single citation of that, it was a great thrill last year, really in a way in the Tata tradition, although not directly connected, that we were judged to be the best entity in the United States corporate or higher education for workers over 50 by the AARP. And since I'm a proud AARP card carrier, I like that.
RATAN TATA: Congratulations.
[APPLAUSE]
DAVID SKORTON: I take that I take that round of applause as, knowing how tough our board of trustees is, I still live to be AARP age, which is good. I like that. Now, what are your thoughts on the current importance of open business borders and globalization at a time where there's a certain tendency for each country to struggle to protect its own interests, its own workers? There's a certain Specter of protectionism again in the world given, the very difficult financial circumstances. What are your thoughts on globalization at a time like this?
RATAN TATA: I think we are going through a period of time where protectionism will, in fact, emerge as an important issue for many, many countries, including those who have been the banner leaders of an open economy. And I think this is a reality that we all will have to face, and the developing countries will have to face it with greater pain than the developed countries.
I think it comes in two parts. One is protection from the transfer of goods and services. The other is how developed countries will continue to maintain competitiveness and what they will do to compete in a world which will undoubtedly retaliate. And what I think would happen is we will have a series of bilateral agreements. The WTO will sink into the background, borders will be created, tariff and nontariff barriers will be established, and we will go back to an era, either wholly or in part, to what we had maybe 10 or 15 years ago. It will be a concern.
DAVID SKORTON: Thank you. Let's talk a bit more about the free market model and the long term fallout of the global financial crisis. What do you think the effect will be on India's astounding growth? And also, what do you think will be the effect on corporate responsibility? Two different questions.
RATAN TATA: I think, on India's growth, we had a GDP growth of about a little under 9% over the last two or three years. More than that. And I think this year we'll end up with about 5, 5.5. Many countries would be very happy to have 5.5, but for us it's like a recession because we're going from nine to five. And it's therefore extremely painful for industry in India.
But given the fact that Indian banks have not, in fact, invested in toxic paper or, in fact, in sub prime instruments, I think we will come out of this probably a little faster than the United States or Europe, but only in terms of our domestic market. I think the export market is going to be under considerable pressure for some time. On the second part of your--
DAVID SKORTON: The same prefix, if you will. Given the global financial crisis and pressure on the free market model, what sort of effects at a high level do you think that'll have on this corporate responsibility that we're talking about today?
RATAN TATA: I think in India in as much it will be confined to the domestic market. I mean, goods and services will be confined to the domestic market. It will not affect the social responsibility of companies. In fact, I think the government will be under greater pressure in the next five years to increase infrastructure spending, to increase a variety of rural development schemes. And it will be the order of the day. So I think it will not affect that.
DAVID SKORTON: I hope it's correct. I'm sure it won't affect your approach. So it's a wonderful positive projection. Thank you. And the last question before we open it up to our colleagues is, it's a tough one to ask you, but what US corporations do you personally respect most in terms of responsible corporate governance and operation? And we won't take any ones that you don't mention. We won't interpret that in any way. We're just curious what you think are the banner-- standard bearers.
RATAN TATA: I'm not that familiar with US corporations. But some of the ones I have interacted with like IBM, like [? Cummins ?], like Honeywell, are those that I respect greatly. And I've had very high levels of respect for what they stand for. And I know that there is a great sense of governance that exists in the United States.
In fact, sometimes just as you've been questioning whether investors feel that social responsibility is an issue, sometimes from the outside looking in, we're frightened by the calls for governance as interpreted by law that exist in the United States. It seems that it's extremely difficult for companies to operate as they should, given artificial levels of governance.
DAVID SKORTON: Very, very interesting. Thank you. Thank you. Well, we're ready for the questions from the audience. We have a couple of microphones. We have two that are going to be set up in the aisles and then we have a couple more up front. I don't know if we have anything for our colleagues in the balcony? Maybe not. Anyway, if you're so comfortable to tell us your name and class.
AUDIENCE: Harry [? Pachesky, ?] class of 1959. Ratan, welcome back.
RATAN TATA: Thank you.
AUDIENCE: On behalf of the class. I hope you can attend some of our events over the weekend. My question is really different from what we've been talking about. You came here in 1955 as a graduate of the Riverdale Country School in New York. I'd like you to describe what your undergraduate experiences were like, your goals and aspirations when you came here, and how you view the school now as a trustee and what you hope to accomplish by the wonderful, wonderful scholarship fund you set up for Cornell.
RATAN TATA: Well, that's a complex question. Let me just start out by saying it's ironic we're here today in Barton Hall, because I think the first freshman meeting we had was in this hall. Scared as hell because there were one of 2,000 people. And in a great effort to make us feel comfortable, somebody stood up here and said, look to your left and your right. One of the--
[LAUGHTER]
One of the people on one side of you won't be here when you graduate. Nice, comfortable, friendly, warm, welcome.
[LAUGHTER]
So that's almost my first recollection of Cornell.
DAVID SKORTON: Mine too.
RATAN TATA: And the years here were very happy. I, like any student, you had your ups and downs. But I really came away a very loyal alumnus with a great sense of belonging to Cornell.
But I didn't really appreciate the value of my education until it was over. And I say this sincerely because inevitably, you're critical when you're in its midst and you realize the value when it's over. When I left here, I had no intention of returning to India. I worked in Los Angeles for a period of time. Went back by accident. Joined the family business by accident. And the rest took place.
I almost came back to the United States twice to live. And whatever little I've been able to do, I think, has been enjoying and challenging. And more often than not, I have called on my education in terms of what I learned. And it just would take too long to talk about that. But I feel that architecture, which has a sort of counter intuitive sense of belonging to business, really equipped me very well to do the kind of job that I had to do.
DAVID SKORTON: Thank you for the question. Thank you for the answer. Now, this business about you did this by accident and that by accident, we should all be so accident prone as you are.
[LAUGHTER]
I'm going to get a book on accidents and practice.
AUDIENCE: I'm Jeffrey [INAUDIBLE], class of 1964. Question about your Nano factory. When you tried to set it up initially, there was considerable resistance on the ground. And I was very surprised to read about it, because I would have thought you'd do a lot of research before choosing the site and do a lot of local polling. And I'm wondering if perhaps the resistance was communist inspired or inspired by elements not from the community. Can you explain what happened?
RATAN TATA: Yeah. Actually, surprisingly, I went to West Bengal because I was inspired by the upfrontness and sincerity of the communist government in West Bengal at that time. And I thought seriously that we could industrialize a part of the country that had been ignored because of communism for the last 15 years. And I was not wrong about the government. I think they were very supportive and very, very upfront throughout that period of time.
But there was one lady politician who had made up her mind to oppose the government in power and did everything within her power to make this happen. And you just couldn't run a factory of dead bodies were thrown onto your site in the night, people were shot at, your people were assaulted. And we just decided that we could only move, and that's what we did.
AUDIENCE: Thank you.
DAVID SKORTON: Thank you for the question. Please.
AUDIENCE: Alan Miller, arts and sciences class of '84 and Alpha Sigma Phi pledge class of '81. Corporate social responsibility is often spoken about with respect to how corporations respectfully treat the natural resource environment or how kindly they treat their employees. But another aspect of social responsibility is how, as a large institution, the corporation promotes opportunity equity and diversity.
And I'm wondering, as a person who was a student here many years ago and as a current trustee, what changes you've seen in that kind of opportunity equity and diversity at the university as well as how you promote those things within all of your many businesses and industry, including things as social class opportunities, opportunities for people with disabilities, gays and lesbian, persons of color, et cetera.
RATAN TATA: OK. You know, if I talk of the university first, let me say that I'm a relatively new trustee and I can only say that what I have seen has been an institution I feel very proud of to be a trustee of for what it is able to do and the ideals by which it is run. And I feel that sincerely it's not being done cosmetically. It's being done as all seriousness.
As far as our own companies are concerned, unfortunately our country is currently being cut and quartered by caste and attempts to break the country up, for political purposes, into religions and to get a voting groups. We have, for example, never sought to ask our employees or our recruits what religion they belong to or what caste they belong to. This is now being forced on us by legislation, which we believe is something that's a very retrograde step.
We're doing everything possible to stop this from spreading into an issue where you have reservations of jobs. We feel what our country should do and what we are trying to have happen is to make India a land of equal opportunity, to give to the less privileged a chance for education. And education is, in fact, one of the key issues. And it may be money to be educated or opportunities to be educated, but not reservation just because you are x religion or y caste. I can't say that we have total freedom to do what we want to do, but that is our endeavor.
AUDIENCE: Thank you very much.
DAVID SKORTON: Thanks for the question. Please.
AUDIENCE: Hello, I'm [INAUDIBLE], class of '59. We're very honored that you're a classmate of ours and very grateful for your gifts. Could you tell us a little bit about who and how you will select the people who will be recipients of your scholarship, the process that it'll happen through, and the characteristics that you will look for? Since they will be part of our community, it would be very interesting to know. And then of course, about the other gift you gave. I assume it will go to the Ag school. If you could tell us more about, again, what you're looking for, the mechanics of how it will be processed.
RATAN TATA: OK. I didn't hear your question too well but I think what you're asking--
AUDIENCE: The first part of the question was how will you select and who will you select for your scholarship.
RATAN TATA: The selection, I did not by error answer that part when the gentleman asked the question about the gifts. The selection, after agreeing with the university on the basis of the general selection, the selection is that of the university based on standards that the university applied.
The gift was given, rather than give it for brick and mortar edifice or otherwise, the gift was devised to give underprivileged Indians a chance to come to Cornell based on their academic capability, which the university would decide, and based on their financial need, which again, the university would decide.
Our hope would be that these young men and women from India would have a chance to be educated in the United States, as I was, and as many other Indians have been. But these would be people who would otherwise not have a chance. I don't think that it bars them from any curriculum.
And on the agriculture side, the intent is that we would have agricultural projects that would increase the agriculture productivity or the crop yields or bring new technologies in agriculture to India or in terms of water harvesting or water management. Because we are over a billion people. Unfortunately, we add 18 million each year, which is one Australia. And we have a problem. And we need to ensure that we can continue to feed our people.
AUDIENCE: It would be decided by the ag school, in other words? It was an open ended gift to be determined by what they feel would be appropriate?
RATAN TATA: No. In terms of research projects and parts of the country that we're looking at, we will decide that together. And I think the university realizes that those decisions relating to the Indian rural area probably cannot be made in isolation from here.
DAVID SKORTON: Ratan, if I may just add an additional comment. The generosity and trust to allow us to use the normal admission criteria of courses is hugely, hugely appreciated. And on the matter of the agriculture and nutrition, not only will we use the huge expertise in basic and applied research and education [INAUDIBLE] as you suggested, but elsewhere in the university as well, in Human Ecology and other areas of the university. Because the emphasis is both on attrition and agriculture.
And as you know, one of the many, many, many enduring strengths of the university is its ability to reach people in different areas. Our leadership, the deans, Dean Henry and Dean [? Matthios ?] and others, have been very supportive of the idea of doing this in partnership with Indian colleagues. And our colleague Professor Alice Pell, who is the Vice Provost for International Relations is working with Ratan's colleagues and colleagues that we have in India for decades to find the right combinations.
And the idea is to do research that can be broadly applicable but directly benefit the people. And you know the old expression, give a child a fish and she eats for a day. Teach her to fish, and she eats for a lifetime. This is really a serious embodiment of that old saw.
AUDIENCE: Sounds wonderful. Thank you so much.
DAVID SKORTON: Over here please.
AUDIENCE: Hi. [? Navid ?] [? Sheik, ?] Law '09. I just wanted to start first by saying that I happened to be in Delhi January '07 when the Nano was debuted at the expo center, and I was just impressed by the scene. It was a really inspiring spectacle. I mean, all cross-sections of the community came out to see this car and it was the most popular thing at the time. So hats off to you on that.
I had two questions. The first is I was curious about your thoughts on India opening up to foreign businesses. I come from the point of view of the legal community, which is kind of a weird community.
[LAUGHTER]
In the sense that a lot of multinational law firms are clamoring to get into India to take a piece of the business, but that specifically is highly regulated. So I was wondering what your thoughts were if that happens across other industries, and whether that's good for India at this point.
And the second question is, Congress just got re-elected with a stronger mandate than before. I was wondering if you had any political views on that, and in general, what do you think government can do better or stop doing to promote business. Thank you.
RATAN TATA: OK. Let me just say that on issues like the legal profession and in some cases the banking industry, there have been controls. And I would have to say that more than the government, these controls have been imposed by your own counterparts in India who would like to see accounting firms, legal firms, foreign banks not have free access to the Indian market. Therefore, I don't share that view, but I am afraid that's probably going to continue for some time. It may open up in an inconsequential manner, but it will still, in effect, be controlled.
As far as the government is concerned, I think the last election has brought a sense of great opportunity for the country to see consistency of policy, to see continuity. We're all very pleased to see Dr. Manmohan Singh continue to be the prime minister. He brings with him great integrity and great academic knowledge of economics. He, I think, deserves everyone's support to have India open up, which I think is the way he would like to go. Whether the coalition will allow him to do that, time will tell. But they're in a stronger position to do that than they have been for the last five years, and we are therefore very hopeful.
AUDIENCE: Beverly [? Burkes, ?] class of '69. When you were talking about corporate responsibility, I was thinking first of Hart's Capitalism At The Crossroads, a Cornell professor. And he talks about the need to find products to serve the vast majority of poor people rather than those of us who are already more than well served.
So I understand what you're doing with this very inexpensive car. I also can understand from a capitalist point of view treating your workers well, because it gives a strong sense of loyalty to the corporation and they work well together. But how do you feel-- where does the right of the shareholder fall in when it comes to straight benevolence, the gifting of corporate profits?
RATAN TATA: I don't understand what you mean.
AUDIENCE: Well, what I'm asking is that I have great admiration for certain aspects of corporate benevolence, as I mentioned. But when it comes down to giving 4%-- and I'm not opposed to it, I'm just asking the question-- of your profits, where do you draw the line to the shareholder? How much of the profit should go to them? Where would you draw a line? I'm not opposed, I'm just asking.
RATAN TATA: No, no, I understand. And I'm not at all upset.
[LAUGHTER]
DAVID SKORTON: Are we sure this is a Cornell event? Because this kind of politeness is very unusual for Cornell.
RATAN TATA: David mentioned that the trusts hold as shareholders 66% of the parent company. The money that gets distributed are earned by the holding companies purely as dividends. They get the same dividend that all shareholders get. It's a distribution of that dividend.
AUDIENCE: Oh, I see.
RATAN TATA: So it's not a gift. So if I just take a minute. Tata Steel will pay a dividend to all its shareholders, including Tata Sons. Tata Sons will pay its-- now, Tata Sons is a private company and it is owned 66% by the Charitable Trust. And they make their dividend payment to the trust, which becomes the trust's income. And the trust distributes 100% of that for charity.
What does happen as a gift is the companies will, the other 90 million, which is, let's say 2%, get distributed in the rural areas around where our plants are located in terms of education, hygiene, creation of skills. et cetera, which we consider to be an investment in building a community around us that is list hit by disparity. Because you must understand that the industrial worker and the villager have a tremendous disparity between themselves.
And all you would have would be great envy and great-- in fact, what happened in West Bengal would be the kind of thing that you would face all the time. Because you'd have relative prosperity amongst workers and nothing being done 150 yards beyond the compound of your plants. So there is a need to be concerned about that element.
AUDIENCE: I didn't understand your structure. When you come down to benevolence, I mean, shareholders have some right. But I didn't understand how you drew the line.
RATAN TATA: I want to show you that we're as concerned about the shareholder, but it's just another stakeholder.
AUDIENCE: OK. Thank you.
RATAN TATA: Thanks.
DAVID SKORTON: If I can interject, I want to thank our colleague for raising the question and commenting on Stu Hart's book, Capitalism At The Crossroads. Stu is a professor in the Johnson School and heads up the Center for Sustainable Global Enterprise. And this very specific to a question we were talking about, you have to allow me to plug something that happened for Cornell that I hope will make you proud.
This last week, the week that we're in now, Monday, Tuesday, and Wednesday, that center sponsored a global forum on finding ways to bring together the clean technologies, so-called green technologies, that are so important to all of us with the need to make money, to be plain about it, at the base of the economic pyramid. And the culmination of the conference a couple of days ago was a panel at the 92nd Street Y in the Upper East Side of New York City that was hosted by Charlie Rose.
And the panelists were Ratan, Stu Hart, Al Gore, who's not a Cornellian, but you can look him up. You can Google him. And also [? Fisk ?] Johnson. And so it was a fascinating conversation. You can look on the website, you can learn more about that. And Stu's book is available for purchase, I might just say.
AUDIENCE: Hi, Lee Cooper, engineering class of 1989. And sort of on topic, I was wondering if you could speak more to the link between corporate social responsibility and the climate change issue and sustainability in general. Are you optimistic that we'll get it right as the world, or whether it's India or the US?
RATAN TATA: I'll give you a short answer. I don't know whether we can get it right. But I think we need to certainly try to get it right. I think we'll conceivably make mistakes. We'll overreact in some areas and we will find a balance in due course. But I think there needs to be an awareness and there needs to be a really good, hard try to be aware of not what we're doing for ourselves, what we're doing for the generations that follow us.
AUDIENCE: Thank you.
DAVID SKORTON: Thank you. Please.
AUDIENCE: Really, on this topic-- I'm Sandra [INAUDIBLE], class of '59. And it's really good to see you again, Ratan, after 50 years.
RATAN TATA: Thanks.
AUDIENCE: On the same topic, how are you and your companies factoring in as part of your corporate social responsibility the concern for the world environment? Are you doing anything in particular? Are you looking at clean technologies?
RATAN TATA: [? Sandy, ?] I think the only thing we can do is to try and lead by example for ourselves. Very often you get misunderstood when you stand up on a platform and make statements, because you seem to be self-serving. So by and large, we have taken positions where we feel very strongly. But by and large, we implement in our own case so that people can't throw stones at us.
We have invested and have looked at new technologies that give us clean processes. We have shunned processes that are dirty. And we have tried to create an awareness in India, as in many other developing countries, where wastage is just taken for granted. And a natural resource like water can be wasted. 4/5 of our rain water go in rivers, into the sea. Politics stop it from being harnessed. These are areas which we consider to be important. But we will not be able to do very much other than in our own small way to try and lead by example.
AUDIENCE: Thank you very much.
DAVID SKORTON: Thank you. Please.
AUDIENCE: Hi, my name is [? Nipa, ?] and I'm pursuing master's of engineering and computer science and I'm [INAUDIBLE] scholar. And I have two quick questions. The first one is, did you dream about making Nano when you were still in Cornell, you were studying? And the second on is when Tata and the car was launched, we all read that you would drive Tata to office and you would drive it yourself. Do you do that to Nano as well? Do you drive it to office?
RATAN TATA: The answer to both your questions, unfortunately, is no.
[LAUGHTER]
I conceived the Nano, I think, three or four years ago, long after I left Cornell. And it's not out as yet, so. I mean, it will be out this coming month. So obviously I don't drive it to work. If I did, it would be viewed as a publicity stunt. And so I probably wouldn't. And I do drive my Indica to work off and on.
AUDIENCE: All right, thank you.
DAVID SKORTON: Thank you. Congratulations on being a [INAUDIBLE] scholar. I tell you, you're 100% right.
[APPLAUSE]
You're 100% right on this thing about people looking at it as a publicity stunt. A year ago, we celebrated a year since we signed the climate commitment on campus. And they wanted me to show that we could use an electric car and so they put me in one of these cars and drove me from Day hall over to Duffield. And when I got there, one of the university photographers, who is a very straightforward person, said hey Mr. Sustainability, could you walk a block?
[LAUGHTER]
So I think you have the right instinct. Right instinct. Back over here.
AUDIENCE: Good afternoon. My name is [? Ashama. ?] I'm historic preservation class of 2008 and I'm starting my Ph.D. this fall in city and regional planning. And I had a question about the diversity of your corporate social responsibility in the sense, do you have any projects that are looking at architecture and planning?
Because I was involved in a couple of projects like the [INAUDIBLE] Foundation is involved in [INAUDIBLE] and the Indian Oil Corporation is involved with development in [INAUDIBLE]. And I'm very, very deeply committed to trying to do something for the architectural heritage of India. So I was just wondering, is something like that a part or vision of your corporate social responsibility?
RATAN TATA: Yes, it is. It's difficult to get involved. I think we were selected at one stage to help in the preservation of the Taj Mahal. Not our hotel, but the monument. And I think we have been engaged with the archaeological association, archeological society of India on that. I don't know where that stands today, but yes. Anything of this nature that we can do to preserve the heritage or to enhance some of our monuments, we would happily do.
AUDIENCE: Thank you.
DAVID SKORTON: Thank you. Please.
AUDIENCE: Hi. My name's [INAUDIBLE]. I'm actually a graduate student here in chemistry from Bangladesh. So congratulations. Tata is an extremely diverse company and shows great promise for the development of India and South Asia as a whole. So my question is pretty much along the same lines, but more towards the sciences. If you notice that if you look around the room, there are a number of South Asian students here, especially in the sciences.
And a problem that occurs is that at the end of it, we're over educated, pretty much, go back toward South Asia and get a job in the sciences, which seem very every day here, but seems alien to in the sense of development from India or Pakistan or Bangladesh or any of that region. So my question was, despite the fact that Tata is so diverse, other than engineers and doctors, which we have enough of somewhat in South Asia, what about the people who are in the pure sciences? Chemistry, biology, physics. How is Tata Industries trying to somewhat lure them back instead of bringing them back and making them join in the forms of accidents?
RATAN TATA: I think it's an issue of concern for us because we would like to see scientists and engineers of excellence return to India. If you don't mind my saying so, some of the problem lies in the top levels of the scientific and engineering community in India that seem to want to protect their turf and do not embrace the young engineers from coming back. It's also the responsibility of companies like ours, which we hope we can do in certain areas, to equip ourselves so the same kind of challenge can exist for young scientists and engineers.
As a group, we are more given to fostering engineering than science in our companies, but we're starting to move in that area. We are now starting to get involved in areas of nanotechnology. We're hoping to have collaborations with universities like Cornell where we could work together. And we must, I think, as a nation do exactly what you said, to give opportunities to people and an encouragement to come back.
AUDIENCE: Thank you.
DAVID SKORTON: Thank you. Please.
AUDIENCE: My name is Edgar [? Gulson ?]. I graduated from the Sibley School of Mechanical Engineering in 1949. This question's a little bit off subject, I believe. But among the two great countries in the world, powers, India and China are two. And I see India and China confronting each other in various ways. I realize it's a broad question, but I would like a few comments on the India versus China issue.
RATAN TATA: Both countries have about the same population. One big difference between the two is that China has a political system that lends itself to much greater ability to implement and execute differently and more effectively than India does. So it is not impossible for China to take a decision to convert a particular place into a cluster for a given sector and to equip it to be world class in that area.
In India, we pay a price for democracy where this takes time and sometimes gets thwarted. Many of us in India would like to cherry pick, if you might, what works very well in China and adopt it in India. On the other hand, India has a rule of law, has English spoken throughout, has a universal market rather than a provincial market. And I've always hoped that India and China could find a way to work together because then we'd remove your dilemma and we'd just be one. So I think that both countries have a great potential. They have a great potential to serve the international community. And I hope they do it with responsibility.
DAVID SKORTON: How many would join me in a recommendation letter for him becoming a diplomat? [INAUDIBLE].
[APPLAUSE]
AUDIENCE: Thank you for the answer.
AUDIENCE: Hi, my name is Kate. I'm actually not an alumni. I'm a current student, class of 2011. But I thought it was interesting when President Skorton did your biography, he mentioned that you graduated with a degree in architecture. And I assume that you probably don't use as much of your architectural degree in your everyday career as you probably thought you would when you left.
What do you find that you've taken most with you from the Cornell education, if not maybe the exact course material? And do you have any advice for anyone who doesn't know what they want to do with their life?
[LAUGHTER]
RATAN TATA: What was the last part?
DAVID SKORTON: Do you have any advice for someone who doesn't know what they want to do with their life?
RATAN TATA: You're not alone.
AUDIENCE: I know. It's a small comfort.
RATAN TATA: No, seriously. I've used my architectural background indirectly every day in the sense that I think if you get away from the specialization of any of the curriculum you have here, you take away something that's much more than mechanical engineering or architecture. It's an ability to survive in a very competitive environment with excellent people, with great instructors. And a great humbling experience, as all of you will have had in your early years where you really wonder where left side, right side, or you are going to be around when your four or five years are over.
I think what I would say is that you need to savor the experience that this would give you. Because whatever you choose to do, it is, in fact, the most significant investment that could be made in your life. And you won't be appreciate it until after you've left.
AUDIENCE: Thank you very much.
DAVID SKORTON: Thank you. Wonderful question.
[APPLAUSE]
You apologized that you weren't an alum, but it was a great question. One thing though, please don't ask better questions than your elders when you come to one of these events next time. Instead of asking an incisive, interesting question, ask something sort of silly next time. That'd be great. OK. Let's see. I think over here next. No, I'm sorry. You're next. Excuse me.
AUDIENCE: My question, more so coming out of the discussion with Al Gore and Stu Hart, is, building a sustainable product like the Nano, it's not about throwing disruptive or breakthrough technologies from the developed countries onto developing ones. So what parts of the product development value chain do really have to be kind of tailor made or indigenized when we try to kind of launch this sustainable product in India to make it an economic success?
RATAN TATA: If I understand, you're asking what technologies have to be tailored to India from overseas?
AUDIENCE: More so what needs to be changed in those technologies or the product development coming out of those technologies. So what needs to be changed in the product or the process to make them a success in developing countries?
RATAN TATA: In developing countries. In the case of the Nano, everything has come from India. There has been nothing that has had to either be taken, changed, or redeveloped for use in India. In fact, it will be the other way. When we choose to export the product, we will have to change some of what we do to fall in line with compliance requirements in other countries.
AUDIENCE: Thank you.
DAVID SKORTON: Thank you. Please.
AUDIENCE: Hi, good afternoon. My name is [? Elisa ?] [? Millerout. ?] I'm a spouse of Cornell alum from class of '99, Leon [? Millerout. ?] And together we have a business here in Ithaca for custom web development called [? Single ?] [? Brook ?] technology. So I'm very particularly interested in web technology as well as the growth of mobile technology in the forms of iPhones, BlackBerrys, other kinds of cell phones. And I'm very curious about the role of these kinds of technologies in your Charitable Trust work in India, and if it does play a role.
RATAN TATA: That's one question I really can't answer. I don't know. I'm struggling my way through living with a BlackBerry.
[LAUGHTER]
My assistant who's sitting there lives by it. I think he eats it for breakfast. I really can't tell. I think cell phones have overtaken the country. And smarter phones and use of messaging, et cetera, by phones is growing at a phenomenal pace and close to 500 million subscribers. 3G networks are about to be introduced in India or will soon be introduced in India. And so India has a young population. The young population is given to new technology. I think you will see tremendous usage of smartphones and the like in the country.
AUDIENCE: Thanks very much.
DAVID SKORTON: So we have three people standing. We have about four minutes left. So if they can be brief questions, we can do all three. We'll start with this gentleman and then up there and then here.
AUDIENCE: Yes, hello. This is my first visit to Cornell and I'm escorting my mom, who was the class president of 1944.
[APPLAUSE]
May you all be so fortunate. The question I have is a little different than when you were referring earlier to the financial meltdown, what's happened in the country and the United States' role in that. How do you see this affecting the leadership ability of the United States going forward and also the value of the dollar?
RATAN TATA: I think you're asking the wrong person about that. I really don't feel qualified to respond to that. I think the change of leadership that has taken place, there is global expectations of great things from that leadership, which I hope will indeed happen. And as far as the effect of that on the global community, I think the United States will always be the banner of and the forerunner of prosperity. It needs to come back online and I'm sure it will.
DAVID SKORTON: Thank you. One question from the balcony please and then we'll have our last.
AUDIENCE: So I am being benefited by Tata Group's benevolence multiple times. I'm a student of the Tata Institute of Fundamental Research. And currently I'm a Ph.D. student here. But my question was, I know that the Tata family is held in great admiration in India and your word is often really influential. So in recent times, we have often felt that the Tatas, through what they say, can make much more of a difference to the Indian situation, be it political or social. This might be a naive question, but is there something specific that holds back the Tatas from actually making a social impact by just using the power of their words?
RATAN TATA: I think you overestimate the power of my voice. I need a microphone just like you do. And I think, as I said, we take positions when we feel we need to do so, but by and large we're apolitic and we just take social positions, and where they have merit, we hope they will be listened to. But we don't have any special position in advocacy, as such.
DAVID SKORTON: Thank you. And our last question.
AUDIENCE: Hello. My name is [INAUDIBLE]. I'm an engineer in the class of 2010. And my question was that, I mean, you said earlier in your presentation that education is very, very critical to India's future success. But there is a distinct lacking in infrastructure in terms of handling such a huge volume of students, because we only have so many Indian institutes of technology, especially if you consider in institutions such as Cornell, which has such a broad research mission and such large capital investment in research on an annual basis. What steps toward philanthropy to India to introduce a research university model comparable to one in the US?
RATAN TATA: What I'm about to say is probably a little explosive. But I think the only way this could happen successfully is that the government stay away from higher education or scientific education. There is, regrettably, a little too much interference from the government to conform to various requirements that the government have, which are usually somewhat politically motivated. And research institutions and colleges should be allowed to grow and operate the way they would freely do so. And I think that would improve things considerably.
AUDIENCE: Thank you.
DAVID SKORTON: Thank you, Ratan.
RATAN TATA: Thank you, David. [INAUDIBLE].
[APPLAUSE]
This is more embarrassing [INAUDIBLE]. Thank you very much.

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AAP alumnus Ratan Tata '59, B.Arch '62, chairman of India's Tata Group, delivered the 2009 Olin Lecture June 5 in the form of a dialogue with Cornell President David Skorton. Skorton and Tata discussed the social responsibilities of corporations.

The Tata Group's many philanthropic trusts make it the largest grant-making organization in India, with aid to such areas as agriculture, water conservation, literacy and education. This year, the Tata Education and Development Trust committed $50 million to Cornell to establish the Tata Scholarship Fund for Students from India and the Tata-Cornell Initiative in Agriculture and Nutrition.